Today's Editorial

21 April 2017

Spend more, regulate better


Source: By Jagdish Rattanani: Deccan Herald


The nation has a new health policy after 14 years. The long gap itself indicates the priority, or the lack thereof, accorded to a sector that is in need of some urgent attention and has deep linkages with the nation's aspiration to grow faster and emerge as a strong economy in the global order. The new policy has proposed seven key shifts in organising healthcare services, among them a welcome change in primary care from selective to assured comprehensive care with linkages to referral hospitals.

In secondary and tertiary care, the policy moves from an input-oriented to an output-based strategic purchasing, which indicates an increased reliance on providing healthcare through the private sector. "Strategic purchasing" involves proactive decisions about which services should be purchased, how they should be purchased and from whom, rather than a "passive purchasing" model under which pre-determined allocations are spent and bills are routinely reimbursed.

The policy describes the strategic purchase of secondary and tertiary care services as a short-term measure. The order of preference for purchase of services will be public sector hospitals followed by services from the not-for profit private sector and then from the commercial private sector in underserved areas, "based on availability of services of acceptable and defined quality criteria". In the long-run, the policy sees "fully equipped and functional public sector hospitals in these areas to meet secondary and tertiary health care needs of the population, especially the poorest and marginalised."

The policy envisages "strategic purchasing" working in a stewardship role by directing private investment towards those areas and services for which currently there are few or no providers. Theoretically speaking, this is one of the key objectives of "strategic purchasing". This means services can be improved by linking plans and priorities to resource allocation and population health needs while customer expectations can be met by building into them purchasing decisions.

But the mechanics of "strategic purchasing" will be long-drawn out and complex in the Indian environment, where the regulatory mechanism is weak, and the private sector has grown fast and trust in the public sector health system is low. The increased reliance on the private sector, even if this is to be "in the short-term" (with no timeframe defined), then becomes an important thrust and change in direction that will mean a new territory for public health services.

In India, the private health sector has by and large failed to align itself to the healthcare needs of the nation. Consider the following facts from the policy document and the "situation analysis" presented as a backdrop to the policy:

India has one of the largest programmes of publicly financed antiretroviral therapy (ART) drugs for HIV-affected persons. In addition, all drugs and diagnostics in vector borne disease control programmes, tuberculosis, leprosy, immunisation programmes and much of the maternity, newborn and infant care are free. Private sector contribution is limited in these areas.

The inability to cover the entire spectrum of healthcare needs through increased public investment has led to a rise in out of pocket expenditure and consequent impoverishment. Over 63 million persons are pushed to poverty every year due to healthcare costs.

In 2014, the average amount spent per child birth as inpatient in private hospitals was nine times that spent in public hospitals for both rural and urban areas across all quintiles.

Another concern is the denial of services by private hospitals for many categories of illnesses, and over supply of some services. Some hospitals, insurance companies and administrators have also resorted to various fraudulent measures.

There is evidence of supplier-induced demand and lack of standard treatment practices, leading to aberrations such as unnecessary injections, irrational treatment regimens and excessive medications being provided in the private medical sector.

Many of these facts in the official document are sourced from non-government studies and reports, though each of them merits alarm bells that should make officialdom sit up and investigate. In reality, the picture may be worse. There have been indications of rank malpractices in some of the biggest names in the healthcare sector.

Obnoxious systems

Among them are obnoxious systems that make in-patients go through diagnostics over weekends only to be charged extra because it is supposed to be a weekly holiday, illegal arrangements under which senior doctors are allegedly given revenue targets to fulfill, and an unholy alliance between some manufacturers of kits and drugs, path labs, practicing doctors and corporate heads. This works as a double whammy since some suppliers work as powerful business lobbies to the detriment of patients. The recent changes in stent prices offer an example of the many efforts made to ensure the prices are not controlled.

The widespread violations don't mean that the entire private health sector is to be condemned. There are some (rare) examples of non-profits and for-profit organisations and professionals offering robust services to the community. But some of the bigger ones building on a misread corporatised, revenue-maximising culture have certainly set the trend and unless they are corrected and punished, the violators will grow and become the standard for others to follow. This cannot be the road to healthcare for all.

So while involving the private sector in healthcare, what is really required is a heavy increase in public sector investment to reach out to more people across all strata of society. This showcases what is possible, sets the national health agenda and provides directional momentum to the growth of the sector.

The current expenditure by the government at 1.15% of the GDP is among the lowest anywhere, and the proposed increase to 2.5% by 2025 is still way behind what is required. This spending has to rise dramatically, coupled with an approach that rewards those who are able to serve the needs of the people but also an approach that is ready to punish the violators.